Gamification Helping Brands Engage Customers, Build Loyalty

Consumer brands and retailers are embracing gamification as the next frontier in building consumer-purchasing habits tied to engagement rather than an unending stream of discounts and other costly incentives.

There is some debate over what constitutes gamification, but most agree it involves using game mechanics to influence participants’ behavior through competitive experiences. This can include games where users compete to be your number one fan, or employees compete to be the most productive member of your team, according to Badgeville, a leading vendor and platform for online games. The most popular formats that lend themselves to promoting brand engagement — in order of popularity — include trivia games, scavenger hunts that require the participants to send photos or go to a particular location, and physical games that require the user to make movements or press buttons on their smartphone or computer to complete a task, according to a survey of 2,004 people conducted in May 2011 for the global advertising firm Saatchi & Saatchi by Ipsos MediaCT.

Half of the U.S. online population between the ages of 18 and 44 now play social games on a daily basis, according to the Saatchi & Saatchi survey. When asked how they would prefer to receive information about a new product, 37 percent chose “play a game online” compared to 44 percent who would rather receive an email and 12 percent who prefer attending an event.

So, what exactly motivates people to engage in an online interaction related to a product? The survey found:

57 percent of respondents said discounts are a very compelling incentive

50 percent also cited “social action” that directly benefits children

50 percent chose games that award points toward a loyalty program

44 percent designated social action that directly benefits the environment

42 percent chose social action that directly benefits a local community

26 percent said attaining status within an online gaming community

“The permutations and potential are limitless, tapping into everyone’s innate desire for success, recognition and status,” said Gabe Zicherman, a gamification evangelist who will address the topic at OIA Rendezvous this October in Boston. “In many ways this levels the playing field substantially for all companies — the future battlefield for talent and loyalty will be won (or lost) with gamification.”

Zicherman’s basic thesis is that gamification provides brands a much less expensive and more engaging alternative to traditional loyalty programs over the long term because it rewards customers not with discounts and merchandise credits — which can become very expensive for companies as a program grows — but with status and other more emotional rewards.

Active Networks, Inc., for instance, partnered with the third-party gamification vendor Badgeville in March 2011 to offer a series of games at trainer.active.com where people can pledge to reach certain fitness or recreation goals, share their progress and compete for status in online communities. People who enroll in the Keen Recess Fresh Air Goal can accumulate lifetime points and earn badges every time they log an outdoor adventure. Three months after integrating Badgeville into the site in March 2011, Active Networks found 83 percent of users posted progress reports to Facebook, and that the ability to earn badges throughout the training journal seemed to encourage people to stick to their goals.

Badgeville claims it has helped brands increase user-generated content by up to 300 percent, social sharing up to 500 percent and time spent on a site by up to 100 percent.

Yet, while third-party vendors like Badgeville, BunchBall and BigDoor have brought down the cost of implementing such programs, gamification probably remains out of reach for most independent retailers and smaller brands. At $40,000 per year, Badgeville’s average implementation fee would consume about half of the average OIA retailer’s annual marketing budget, according to OIA’s 2011 Retailer Benchmarking Report. For this reason, many smaller outdoor brands have been slow to adopt the tool, preferring instead to incorporate elements of gamification into more traditional contests they are launching on Facebook and their own websites. (See related sidebar.)

Many Fortune 500 companies and other large enterprises, on the other hand, are flocking to full-fledged gamification schemes.

Last fall, for instance, Nike launched its “Winter’s Angry” campaign to promote its Hyperwarm insulated clothing line. The game invited users to perform a series of finger drills to match the actions of famous athletes. Players with the highest scores were eligible for prizes, including a grand prize trip for two to meet a world-class Nike athlete.

Zicherman, who is building a database of gamification case studies on his website, will explore all the pros and cons for small and large companies in his OIA Rendezvous presentation. In the meantime, here are some excerpts from Saatchi & Saatchi’s survey that may help your organization size up the gamification opportunity:

Females tend to use games to relieve boredom, while males favor games as a way to compete.

53 percent of respondents play games on their smartphones.

66 percent play on their tablet computers, which other research has shown to be the most profitable channel for mobile commerce.

Two-thirds of those interested in social games, which are defined as online games that you can play on social networks or apps, said they would be very likely to opt into a game if it was sponsored by friends or family. This compared to 47 percent for games sponsored by non-profit or charity groups, 36 percent for games sponsored by local and small businesses and 27 percent for games sponsored by large corporate brands.

The more someone plays games, the more likely they are to recall the identity of an in-game advertiser. Microsoft, Coca-Cola and McDonald’s were ranked as the most recalled in-game advertisers.

In summary, gamification has emerged as a promising tool for engaging customers online, potentially at a much lower cost than offering discounts or acquiring new customers through paid search and other online advertising. For these reasons, you might consider including some elements of gamification in your digital marketing and customer loyalty toolbox.